LAWS OF MALAYSIA
REPRINT
Act 204
BILLS OF EXCHANGE
ACT 1949
Incorporating all amendments up to 1 January 2006
PUBLISHED BY
THE COMMISSIONER OF LAW REVISION, MALAYSIA
UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968
IN COLLABORATION WITH
PERCETAKAN NASIONAL MALAYSIA BHD
2006
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BILLS OF EXCHANGE ACT 1949
First enacted
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1949 (Ordinance No. 75
of 1949)
Revised
... ... ... ... ... ... ...
1978 (Act 204 w.e.f.
29 April 1978)
PREVIOUS REPRINT
First Reprint
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...
...
...
...
2001
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LAWS OF MALAYSIA
Act 204
BILLS OF EXCHANGE ACT 1949
ARRANGEMENT OF SECTIONS
PART I
PRELIMINARY
Section
1.
Short title
2.
Interpretation
PART II
BILLS OF EXCHANGE
Form and Interpretation
3.
Bill of exchange defined
4.
Inland and foreign bills
5.
Effect where different parties to bill are the same person
6.
Address to drawee
7.
Certainty required as to payee
8.
What bills are negotiable
9.
Sum payable
10.
Bill payable on demand
11.
Bill payable at a future time
12.
Omission of date in bill payable after date or acceptance after sight
13.
Ante-dating and post-dating
14.
Computation of time of payment
15.
Case of need
16.
Optional stipulations by drawer or indorser
17.
Definition and requisites of acceptance
18.
Time for acceptance
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Section
19.
General and qualified acceptances
20.
Inchoate instruments
21.
Delivery
Capacity and Authority of Parties
22.
Capacity of parties
23.
Signature essential to liability
24.
Forged or unauthorized signature
25.
Procuration signatures
26.
Person signing as agent or in representative capacity
The Consideration for a Bill
27.
Value and holder for value
28.
Accommodation bill or party
29.
Holder in due course
30.
Presumption of value and good faith
Negotiation of Bills
31.
Negotiation of bill
32.
Requisites of a valid indorsement
33.
Conditional indorsement
34.
Indorsement in blank and special indorsement
35.
Restrictive indorsement
36.
Negotiation of overdue or dishonoured bill
37.
Negotiation of bill to party already liable thereon
38.
Rights of the holder
General Duties of the Holder
39.
When presentment for acceptance is necessary
40.
Time for presenting bill payable after sight
41.
Rules as to presentment for acceptance and excuses for non-presentment
42.
Non-acceptance
43.
Dishonour by non-acceptance and its consequences
44.
Duties as to qualified acceptances
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Bills of Exchange
Section
45.
Rules as to presentment for payment
46.
Excuses for delay or non-presentment for payment
47.
Dishonour by non-payment
48.
Notice of dishonour and effect of non-notice
49.
Rules as to notice of dishonour
50.
Excuses for delay in giving notice of dishonour
51.
Noting or protest of bill
52.
Duties of holder as regards drawee or acceptor
Liabilities of Parties
53.
Funds in hands of drawee
54.
Liability of acceptor
55.
Liability of drawer or indorser
56.
Stranger signing bill liable as indorser
57.
Measure of damages against parties to dishonoured bill
58.
Transferor by delivery and transferee
Discharge of Bill
59.
Payment in due course
60.
Banker paying demand draft whereon indorsement is forged
61.
Acceptor the holder at maturity
62.
Express waiver or renunciation
63.
Cancellation
64.
Alteration of bill
Acceptance and Payment for Honour
65.
Acceptance for honour supra protest
66.
Liability of acceptor for honour
67.
Presentment to acceptor for honour
68.
Payment for honour supra protest
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Lost Instruments
Section
69.
Holder's right to duplicate of lost bill
70.
Suit on lost bill
Bill in a Set
71.
Rules as to sets
Conflict of Laws
72.
Rules where laws conflict
PART III
CHEQUES ON A BANKER
73.  Cheque defined
73A. Knowingly or negligently facilitating forgery
74.  Presentment of cheque for payment
74A. Presentment of cheque through document image processing system
75.  Revocation of banker's authority
Crossed Cheques
76.
General and special crossings defined
77.
Crossing by drawer or after issue
78.
Crossing a material part of cheques
79.
Duties of banker as to crossed cheques
80.
Protection to banker and drawer where cheque is crossed
81.
Effect of "not negotiable" crossing on holder
81A.
Non-transferable cheque
Special Provisions Relating to Endorsement, Etc.
82.
Protection of bankers paying unindorsed or irregularly indorsed cheques,
etc.
83.
Rights of bankers collecting cheques not indorsed by holders
84.
Unindorsed cheques as evidence of payment
85.
Protection of bankers collecting payment of cheques, or certain other
instruments
86.
Application of certain provisions to instruments not being bills of
exchange
87.
Saving
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Bills of Exchange
PART IV
PROMISSORY NOTES
Section
88.
Promissory note defined
89.
Delivery necessary
90.
Joint and several notes
91.
Note payable on demand
92.
Presentment of note for payment
93.
Liability of maker
94.
Application of Part II to notes
PART V
SUPPLEMENTARY
95.
Good faith
96.
Signature
97.
Computation of time
98.
When noting equivalent to protest
99.
Protest when notary not accessible
100.
Dividend warrants and banker's draft may be crossed
101.
Savings
102.
Repeal
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Bills of Exchange
LAWS OF MALAYSIA
Act 204
BILLS OF EXCHANGE ACT 1949
An Act relating to Bills of Exchange, Cheques and Promissory
Notes.
[Federal Territory, Johore, Kedah, Kelantan,
Negeri Sembilan, Pahang, Perak, Perlis, Selangor and
Terengganu--31 December 1949, Ord. 75/1949;
Malacca and Penang--1 August 1959, Ord. 30/1959;
Sabah and Sarawak--1 July 1965, L.N. 260/1965]
PART I
PRELIMINARY
Short title
1.
This Act may be cited as the Bills of Exchange Act 1949.
Interpretation
2.
In this Act, unless the context otherwise requires--
"acceptance" means an acceptance completed by delivery or
notification;
"bank holiday" and "public holiday" respectively include, as
regards any State, any day declared to be such under any written
law for the time being in force in any State and includes any day
(other than a Sunday) observed as a weekly holiday in any State;
"banker" includes a body of persons, whether incorporated or
not, who carry on the business of banking;
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"bankrupt" includes any person whose estate is vested in a
trustee or assignee under the law for the time being in force
relating to bankruptcy;
"bearer" means the person in possession of a bill or note which
is payable to bearer;
"bill" means bill of exchange;
"delivery" means transfer of possession, actual or constructive,
from one person to another;
"foreign currency" means any currency other than currency--
(a) of Malaysia; or
(b) which by reason of any agreement or arrangement entered
into between the Central Bank and any other monetary
authority of another country, is deemed to be inter-
changeable with the currency of Malaysia;
"holder" means the payee or indorsee of a bill or note who is
in possession of it, or the bearer thereof;
"indorsement" means an indorsement completed by delivery;
"issue" means the first delivery of a bill or note, complete in
form, to a person who takes it as a holder;
"note" means promissory note;
"suit" includes action, counterclaim and set-off;
"value" means valuable consideration.
PART II
BILLS OF EXCHANGE
Form and Interpretation
Bill of exchange defined
3. (1) A bill of exchange is an unconditional order in writing,
addressed by one person to another, signed by the person giving
it, requiring the person to whom it is addressed to pay on demand
or at a fixed or determinable future time a sum certain in money
to, or to the order of, a specified person, or to bearer.
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Bills of Exchange
(2) An instrument which does not comply with these conditions,
or which orders any act to be done in addition to the payment of
money, is not a bill of exchange.
(3) An order to pay out of a particular fund is not unconditional
within the meaning of this section; but an unqualified order to
pay, coupled with (a) an indication of a particular fund out of
which the drawee is to reimburse himself or a particular account
to be debited with the amount, or (b) a statement of the transaction
which gives rise to the bill, is unconditional.
(4) A bill is not invalid by reason--
(a) that it is not dated;
(b) that it does not specify the value given, or that any value
has been given therefor;
(c) that it does not specify the place where it is drawn or the
place where it is payable.
Inland and foreign bills
4. (1) An inland bill is a bill which is or on the face of it purports
to be--
(a) both drawn and payable within Malaysia; or
(b) drawn within Malaysia upon some person resident therein.
Any other bill is a foreign bill.
(2) Unless the contrary appears on the face of the bill the holder
may treat it as an inland bill.
Effect where different parties to bill are the same person
5. (1) A bill may be drawn payable to, or to the order of the
drawer; or it may be drawn payable to, or to the order of, the
drawee.
(2) Where in a bill drawer and drawee are the same person, or
where the drawee is a fictitious person or a person not having
capacity to contract, the holder may treat the instrument, at his
option, either as a bill of exchange or as a promissory note.
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Address to drawee
6. (1) The drawee must be named or otherwise indicated in a bill
with reasonable certainty.
(2) A bill may be addressed to two or more drawees whether
they are partners or not, but an order addressed to two drawees
in the alternative or to two or more drawees in succession is not
a bill of exchange.
Certainty required as to payee
7. (1) Where a bill is not payable to bearer, the payee must be
named or otherwise indicated therein with reasonable certainty.
(2) A bill may be made payable to two or more payees jointly,or
it may be made payable in the alternative to one of two, or one
or some of several payees. A bill may also be made payable to the
holder of an office for the time being.
(3) Where the payee is a fictitious or non-existing person the
bill may be treated as payable to bearer.
What bills are negotiable
8. (1) When a bill contains words prohibiting transfer, or indicating
an intention that it should not be transferable, it is valid as between
the parties thereto, but is not negotiable.
(2) A negotiable bill may be payable either to order or to bearer.
(3) A bill is payable to bearer which is expressed to be so
payable, or on which the only or last indorsement is an indorsement
in blank.
(4) A bill is payable to order which is expressed to be so payable,
or which is expressed to be payable to a particular person, and
does not contain words prohibiting transfer or indicating an intention
that it should not be transferable.
(5) Where a bill, either originally or by indorsement, is expressed
to be payable to the order of a specified person, and not to him
or his order, it is nevertheless payable to him or his order at his
option.
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Bills of Exchange
Sum payable
9. (1) The sum payable by a bill is a sum certain within the
meaning of this Act, although it is required to be paid--
(a) with interest;
(b) by stated instalments;
(c) by stated instalments, with a provision that upon default
in payment of any instalment the whole shall become
due;
(d) according to an indicated rate of exchange or according
to a rate of exchange to be ascertained as directed by the
bill.
(2) Where the sum payable is expressed in words and also in
figures, and there is a discrepancy between the two, the sum
denoted by the words is the amount payable.
(3) Where a bill is expressed to be payable with interest, unless
the instrument otherwise provides, interest runs from the date of
the bill, and, if the bill is undated, from the issue thereof.
Bill payable on demand
10. (1) A bill is payable on demand--
(a) which is expressed to be payable on demand, or at sight,
or on presentation; or
(b) in which no time for payment is expressed.
(2) Where a bill is accepted or indorsed when it is overdue, it
shall, as regards the acceptor who so accepts, or any indorser who
so indorsers it, be deemed a bill payable on demand.
Bill payable at a future time
11. (1) A bill is payable at a determinable future time within the
meaning of this Act which is expressed to be payable--
(a) at a fixed period after date or sight;
(b) on or at a fixed period after the occurrence of a specified
event which is certain to happen, though the time of
happening may be uncertain.
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(2) An instrument expressed to be payable on a contingency is
not a bill, and the happening of the event does not cure the defect.
Omission of date in bill payable after date or acceptance after
sight
12.  Where a bill expressed to be payable at a fixed period after
date is issued undated, or where the acceptance of a bill payable
at a fixed period after sight is undated, any holder may insert
therein the true date of issue or acceptance, and the bill shall be
payable accordingly:
Provided that--
(a) where the holder in good faith and by mistake inserts a
wrong date; and
(b) in every case where a wrong date is inserted, if the bill
subsequently comes into the hands of a holder in due
course,
the bill shall not be avoided thereby, but shall operate and be
payable as if the date so inserted had been the true date.
Ante-dating and post-dating
13. (1) Where a bill or an acceptance or any indorsement on a
bill is dated, the date shall, unless the contrary is proved, be
deemed to be the true date of the drawing, acceptance, or indorsement,
as the case may be.
(2) A bill is not invalid by reason only that it is ante-dated or
post-dated, or that it bears date on a Sunday.
Computation of time of payment
14.  Where a bill is not payable on demand the day on which it
falls due is determined as follows:
(a) three days, called days of grace, are, in every case where
the bill itself does not otherwise provide, added to the
time of payment as fixed by the bill, and the bill is due
and payable on the last day of grace:
Provided that--
(i) when the last day of grace falls on a Sunday,
public holiday or bank holiday;
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Bills of Exchange
(ii) when the last day of grace of a bill drawn payable
in a foreign currency falls on a Saturday, Sunday,
public holiday or bank holiday,
the bill shall be due and payable on the next succeeding
business day;
(b) where a bill is payable at a fixed period after date, after
sight, or after the happening of a specified event, the
time of payment is determined by excluding the day
from which the time is to begin to run and by including
the day of payment;
(c) where a bill is payable at a fixed period after sight, the
time begins to run from the date of the acceptance if the
bill be accepted, and from the date of noting or protest
if the bill be noted or protested for non-acceptance, or
for non-delivery;
(d) the term "month" in a bill means calendar month.
Case of need
15.  The drawer of a bill and any indorser may insert therein the
name of a person to whom the holder may resort in case of need,
that is to say, in case the bill is dishonoured by non-acceptance
or non-payment. Such person is called the referee in case of need.
It is in the option of the holder to resort to the referee in case of
need or not, as he may think fit.
Optional stipulations by drawer or indorser
16.  The drawer of a bill, and any indorser, may insert therein an
express stipulation--
(a) negativing or limiting his own liability to the holder;
(b) waiving as regards himself some or all of the holder's
duties.
Definition and requisites of acceptance
17. (1) The acceptance of a bill is the signification by the drawee
of his assent to the order of the drawer.
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(2) An acceptance is invalid unless it complies with the following
conditions, namely--
(a) it must be written on the bill and be signed by the drawee.
The mere signature of the drawee without additional words
is sufficient;
(b) it must not express that the drawee will perform his
promise by any other means than the payment of money.
Time for acceptance
18. (1) A bill may be accepted--
(a) before it has been signed by the drawer, or while otherwise
incomplete;
(b) when it is overdue, or after it has been dishonoured by
a previous refusal to accept, or by non-payment.
Date of acceptance after previous dishonour
(2) W h e n a bill payable after sight is dishonoured by
non-acceptance, and the drawee subsequently accepts it, the holder,
in the absence of any different agreement, is entitled to have the
bill accepted as of the date of first presentment to the drawee for
acceptance.
General and qualified acceptances
19. (1) An acceptance is either (a) general or (b) qualified.
(2) A general acceptance assents without qualification to the
order of the drawer.
(3) (a) A qualified acceptance in express terms varies the effect
of the bill as drawn.
(b) In particular an acceptance is qualified which is--
(i) conditional, that is to say, which makes payment
by the acceptor dependent on the fulfilment of a
condition therein stated;
(ii) partial, that is to say, an acceptance to pay part
only of the amount for which the bill is drawn;
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Bills of Exchange
(iii) local, that is to say, an acceptance to pay only at
a particular specified place;
An acceptance, to pay at a particular place, is a
general acceptance, unless it expressly states that
the bill is to be paid there only, and not elsewhere;
(iv) qualified as to time;
(v) the acceptance of some one or more of the drawees,
but not of all.
Inchoate instruments
20. (1) Where a simple signature on a blank stamped paper is
delivered by the signer in order that it may be converted into a
bill, it operates as prima facie authority to fill it up as a complete
bill for any amount the stamp will cover, using the signature for
that of the drawer, or the acceptor, or an indorser; and, in like
manner, when a bill is wanting in any material particular, the
person in possession of it has a prima facie authority to fill up the
omission in any way he thinks fit.
(2) In order that any such instrument when completed may be
enforceable against any person who became a party thereto prior
to its completion, it must be filled up within a reasonable time and
strictly in accordance with the authority given. Reasonable time
for this purpose is a question of fact:
Provided that if any such instrument after completion is negotiated
to a holder in due course it shall be valid and effectual for all
purposes in his hands, and he may enforce it as if it had been filled
up within a reasonable time and strictly in accordance with the
authority given.
Delivery
21. (1) Every contract on a bill, whether it be the drawer's, the
acceptor's, or an indorser's, is incomplete and revocable, until
delivery of the instrument in order to give effect thereto:
Provided that where an acceptance is written on a bill, and the
drawee gives notice to or according to the directions of the person
entitled to the bill that he has accepted it, the acceptance then
becomes complete and irrevocable.
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(2) As between immediate parties, and as regards a remote
party other than a holder in due course, the delivery--
(a) in order to be effectual must be made either by or under
the authority of the party drawing, accepting or indorsing,
as the case may be;
(b) may be shown to have been conditional or for a special
purpose only, and not for the purpose of transferring the
property in the bill.
But if the bill be in the hands of a holder in due course, a valid
delivery of the bill by all parties prior to him so as to make them
liable to him is conclusively presumed.
(3) Where a bill is no longer in the possession of a party who
h a s signed it as drawer, acceptor, or indorser, a valid and
unconditional delivery by him is presumed until the contrary is
proved.
Capacity and Authority of Parties
Capacity of parties
22. (1) Capacity to incur liability as a party to a bill is co-extensive
with capacity to contract:
Provided that nothing in this section shall enable a corporation
to make itself liable as drawer; acceptor, or indorser of a bill
unless it is competent to it so to do under the law for the time
being in force relating to corporations.
(2) Where a bill is drawn or indorsed by a minor or corporation
having no capacity or power to incur liability on a bill, the drawing
or indorsement entitles the holder to receive payment of the bill,
and to enforce it against any other party thereto.
Signature essential to liability
23.  No person is liable as drawer, indorser, or acceptor of a bill
who has not signed it as such:
Provided that--
(a) where a person signs a bill in a trade or assumed name,
he is liable thereon as if he had signed it in his own
name;
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Bills of Exchange
(b) the signature of the name of a firm is equivalent to the
signature by the person so signing of the names of all
persons liable as partners in that firm.
Forged or unauthorized signature
24.  Subject to the provisions of this Act, where a signature on
a bill is forged or placed thereon without the authority of the
person whose signature it purports to be, the forged or unauthorized
signature is wholly inoperative, and no right to retain the bill or
to give a discharge therefor or to enforce payment thereof against
any party thereto can be acquired through or under that signature,
unless the party against whom it is sought to retain or enforce
payment of the bill is precluded from setting up the forgery or
want of authority:
Provided that nothing in this section shall affect the ratification
of an unauthorized signature not amounting to a forgery.
Procuration signatures
25.  A signature by procuration operates as notice that the agent
has but a limited authority to sign, and the principal is only bound
by such signature if the agent in so signing was acting within the
actual limits of his authority.
Person signing as agent or in representative capacity
26. (1) Where a person signs a bill as drawer, indorser, or acceptor,
and adds words to his signature, indicating that he signs for or on
behalf of a principal, or in a representative character, he is not
personally liable thereon; but the mere addition to his signature
of words describing him as an agent, or as filling a representative
character, does not exempt him from personal liability.
(2) In determining whether a signature on a bill is that of the
principal or that of the agent by whose hand it is written, the
construction most favourable to the validity of the instrument shall
be adopted.
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The Consideration for a Bill
Value and holder for value
27. (1) Valuable consideration for a bill may be constituted by--
(a) any consideration sufficient to support a simple contract;
(b) an antecedent debt or liability. Such a debt or liability
is deemed valuable consideration whether the bill is payable
on demand or at a future time.
(2) Where value has at any time been given for a bill the holder
is deemed to be a holder for value as regards the acceptor and all
parties to the bill who become parties prior to such time.
(3) Where the holder of a bill has a lien on it arising either from
contract or by implication of law, he is deemed to be a holder for
value to the extent of the sum for which he has a lien.
Accommodation bill or party
28. (1) An accommodation party to a bill is a person who has
signed a bill as drawer, acceptor, or indorser, without receiving
value therefor, and for the purpose of lending his name to some
other person.
(2) An accommodation party is liable on the bill to a holder for
value; and it is immaterial whether, when such holder took the bill,
he knew such party to be an accommodation party or not.
Holder in due course
29. (1) A holder in due course is a holder who has taken a bill,
complete and regular on the face of it, under the following conditions,
namely--
(a) that he became the holder of it before it was overdue, and
without notice that it had been previously dishonoured,
if such was the fact;
(b) that he took the bill in good faith and for value, and that
at the time the bill was negotiated to him, he had no
notice of any defect in the title of the person who negotiated
it.
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Bills of Exchange
(2) In particular the title of a person who negotiates a bill is
defective within the meaning of this Act when he obtained the bill,
or the acceptance thereof, by fraud, duress, or force and fear, or
other unlawful means, or for an illegal consideration, or when he
negotiates it in breach of faith, or under such circumstances as
amount to a fraud.
(3) A holder (whether for value or not) who derives his title to
a bill through a holder in due course, and who is not himself a
party to any fraud or illegality affecting it, has all the rights of that
holder in due course as regards the acceptor and all parties to the
bill prior to that holder.
Presumption of value and good faith
30. (1) Every party whose signature appears on a bill is prima
facie deemed to have become a party thereto for value.
(2) Every holder of a bill is prima facie deemed to be a holder
in due course; but if in an action on a bill it is admitted or proved
that the acceptance, issue, or subsequent negotiation of the bill is
affected with fraud, duress, or force and fear, or illegality, the
burden of proof is shifted, unless and until the holder proves that,
subsequent to the alleged fraud or illegality, value has in good
faith been given for the bill.
Negotiation of Bills
Negotiation of bill
31. (1) A bill is negotiated when it is transferred from one person
to another in such a manner as to constitute the transferee the
holder of the bill.
(2) A bill payable to bearer is negotiated by delivery.
(3) A bill payable to order is negotiated by the indorsement of
the holder completed by delivery.
(4) Where the holder of a bill payable to his order transfers it
for value without indorsing it, the transfer gives the transferee
such title as the transferor had in the bill, and the transferee in
addition acquires the right to have the indorsement of the transferor.
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(5) Where any person is under obligation to indorse a bill in a
representative capacity, he may indorse the bill in such terms as
to negative personal liability.
Requisites of a valid indorsement
32.  An indorsement in order to operate as a negotiation must
comply with the following conditions, namely--
(a) it must be written on the bill itself and be signed by the
indorser; the simple signature of the indorser on the bill,
without additional words, is sufficient; an indorsement
written on an allonge, or on a "copy" of a bill issued or
negotiated in a country where "copies" are recognized,
is deemed to be written on the bill itself;
(b) it must be an indorsement of the entire bill; a partial
indorsement, that is to say, an indorsement which purports
to transfer to the indorsee a part only of the amount
payable, or which purports to transfer the bill to two or
more indorsees severally, does not operate as a negotiation
of the bill;
(c) where a bill is payable to the order of two or more
payees or indorsees who are not partners, all must indorse
unless the one indorsing has authority to indorse for the
others;
(d) where, in a bill payable to order, the payee or indorsee
is wrongly designated, or his name is misspelt, he may
indorse the bill as therein described, adding, if he thinks
fit, his proper signature;
(e) where there are two or more indorsements on a bill, each
indorsement is deemed to have been made in the order
in which it appears on the bill, until the contrary is
proved;
(f) an indorsement may be made in blank or special. It may
also contain terms making it restrictive.
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Bills of Exchange
Conditional indorsement
33.  Where a bill purports to be indorsed conditionally, the condition
may be disregarded by the payer, and payment to the indorsee is
valid whether the condition has been fulfilled or not.
Indorsement in blank and special indorsement
34. (1) An indorsement in blank specifies no indorsee, and a bill
so indorsed becomes payable to bearer.
(2) A special indorsement specifies the person to whom, or to
whose order, the bill is to be payable.
(3) The provisions of this Act relating to a payee apply with the
necessary modifications to an indorsee under a special indorsement.
(4) When a bill has been indorsed in blank, any holder may
convert the blank indorsement into a special indorsement by writing
above the indorser's signature a direction to pay the bill to or to
the order of himself or some other person.
Restrictive indorsement
35. (1) An indorsement is restrictive which prohibits the further
negotiation of the bill or which expresses that it is a mere authority
to deal with the bill as thereby directed and not a transfer of the
ownership thereof, as, for example, if a bill be indorsed "Pay D
only", or "Pay D for the account of X", or "Pay D or order for
collection".
(2) A restrictive indorsement gives the indorsee the right to
receive payment of the bill and to sue any party thereto that his
indorser could have sued, but gives him no power to transfer his
rights as indorsee unless it expressly authorizes him to do so.
(3) Where a restrictive indorsement authorizes further transfer,
all subsequent indorsees take the bill with the same rights and
subject to the same liabilities as the first indorsee under the restrictive
indorsement.
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Negotiation of overdue or dishonoured bill
36. (1) Where a bill is negotiable in its origin it continues to be
negotiable until it has been--
(a) restrictively indorsed; or
(b) discharged by payment or otherwise.
(2) Where an overdue bill is negotiated, it can only be negotiated
subject to any defect of title affecting it at its maturity, and
thenceforward no person who takes it can acquire or give a better
title than that which the person from whom he took it had.
(3) A bill payable on demand is deemed to be overdue within
the meaning and for the purposes of this section, when it appears
on the face of it to have been in circulation for an unreasonable
length of time. What is an unreasonable length of time for this
purpose is a question of fact.
(4) Except where an indorsement bears date after the maturity
of the bill, every negotiation is prima facie deemed to have been
effected before the bill was overdue.
(5) Where a bill which is not overdue has been dishonoured,
any person who takes it with notice of the dishonour takes it
subject to any defect of title attaching thereto at the time of dishonour,
but nothing in this subsection shall affect the rights of a holder
in due course.
Negotiation of bill to party already liable thereon
37.  Where a bill is negotiated back to the drawer, or to a prior
indorser or to the acceptor, such party may, subject to this Act,
reissue and further negotiate the bill, but he is not entitled to
enforce payment of the bill against any intervening party to whom
he was previously liable.
Rights of the holder
38.
The rights and powers of the holder of a bill are as follows:
(a) he may sue on the bill in his own name;
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Bills of Exchange
(b) where he is a holder in due course, he holds the bill free
from any defect of title of prior parties, as well as from
mere personal defences available to prior parties among
themselves, and may enforce payment against all parties
liable on the bill;
(c) where his title is defective--
(i) if he negotiates the bill to a holder in due course,
that holder obtains a good and complete title to the
bill; and
(ii) if he obtains payment of the bill the person who
pays him in due course gets a valid discharge for
the bill.
General Duties of the Holder
When presentment for acceptance is necessary
39. (1) Where a bill is payable after sight, presentment for acceptance
is necessary in order to fix the maturity of the instrument.
(2) Where a bill expressly stipulates that it shall be presented
for acceptance, or where a bill is drawn payable elsewhere than
at the residence or place of business of the drawee, it must be
presented for acceptance before it can be presented for payment.
(3) In no other case is presentment for acceptance necessary in
order to render liable any party to the bill.
(4) Where the holder of a bill, drawn payable elsewhere than
at the place of business or residence of the drawee, has not time,
with the exercise of reasonable diligence, to present the bill for
acceptance before presenting it for payment on the day that it falls
due, the delay caused by presenting the bill for acceptance before
presenting it for payment is excused, and does not discharge the
drawer and indorsers.
Time for presenting bill payable after sight
40. (1) Subject to this Act, when a bill payable after sight is
negotiated, the holder must either present it for acceptance or
negotiate it within a reasonable time.
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(2) If he does not do so, the drawer and all indorsers prior to
that holder are discharged.
(3) In determining what is reasonable time within the meaning
of this section, regard shall be had to the nature of the bill, the
usage of trade with respect to similar bills, and the facts of the
particular case.
Rules as to presentment for acceptance and excuses for
non-presentment
41. (1) A bill is duly presented for acceptance which is presented
in accordance with the following rules:
(a) the presentment must be made by or on behalf of the
holder to the drawee or to some person authorized to
accept or refuse acceptance on his behalf at a reasonable
hour on a business day and before the bill is overdue;
(b) where a bill is addressed to two or more drawees, who
are not partners, presentment must be made to them all,
unless one has authority to accept for all, then presentment
may be made to him only;
(c) where the drawee is dead, presentment may be made to
his personal representative;
(d) where the drawee is bankrupt, presentment may be made
to him or to his trustee or assignee;
(e) where authorized by agreement or usage, a presentment
through the post office is sufficient.
(2) Presentment in accordance with these rules is excused, and
a bill may be treated as dishonoured by non-acceptance--
(a) where the drawee is dead or bankrupt, or is a fictitious
person or a person not having capacity to contract by bill;
(b) where, after the exercise of reasonable diligence, such
presentment cannot be effected;
(c) where, although the presentment has been irregular,
acceptance has been refused on some other ground.
(3) The fact that the holder has reason to believe that the bill,
on presentment, will be dishonoured does not excuse presentment.
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Bills of Exchange
Non-acceptance
42.  When a bill is duly presented for acceptance and is not
accepted within the customary time, the person presenting it must
treat it as dishonoured by non-acceptance. If he does not, the
holder shall lose the right of recourse against the drawer and
indorsers.
Dishonour by non-acceptance and its consequences
43. (1) A bill is dishonoured by non-acceptance--
(a) when it is duly presented for acceptance, and such an
acceptance as is prescribed by this Act is refused or
cannot be obtained; or
(b) when presentment for acceptance is excused and the bill
is not accepted.
(2) Subject to this Act when a bill is dishonoured by non-
acceptance, an immediate right of recourse against the drawer and
indorsers accrues to the holder, and no presentment for payment
is necessary.
Duties as to qualified acceptances
44. (1) The holder of a bill may refuse to take a qualified acceptance,
and if he does not obtain an unqualified acceptance, may treat the
bill as dishonoured by non-acceptance.
(2) Where a qualified acceptance is taken, and the drawer or an
indorser has not expressly or impliedly authorized the holder to
take a qualified acceptance, or does not subsequently assent thereto,
such drawer or indorser is discharged from his liability on the bill.
The provisions of this subsection do not apply to a partial
acceptance, whereof due notice has been given. Where a foreign
bill has been accepted as to part, it must be protested as to the
balance.
(3) When the drawer or indorser of a bill receives notice of a
qualified acceptance, and does not, within a reasonable time, express
his dissent to the holder, he shall be deemed to have assented
thereto.
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Rules as to presentment for payment
45. (1) Subject to this Act, a bill must be duly presented for
payment. If it be not so presented, the drawer and indorsers shall
be discharged.
(2) A bill is duly presented for payment which is presented in
accordance with the following rules--
(a) where the bill is not payable on demand, presentment
must be made on the day it falls due;
(b) where the bill is payable on demand, then, subject to this
Act, presentment must be made within a reasonable time
after its issue in order to render the drawer liable, and
within a reasonable time after its indorsement, in order
to render the indorser liable; in determining what is a
reasonable time, regard shall be had to the nature of the
bill, the usage of trade with regard to similar bills, and
the facts of the particular case;
(c) presentment must be made by the holder or by some
person authorized to receive payment on his behalf at a
reasonable hour on a business day, at the proper place as
hereinafter defined, either to the person designated by
the bill as payer, or to some person authorized to pay or
refuse payment on his behalf, if with the exercise of
reasonable diligence such person can there be found;
(d) a bill is presented at the proper place--
(i) where the place of payment is specified in the bill
and the bill is there presented;
(ii) where no place of payment is specified, but the
address of the drawee or acceptor is given in the
bill, and the bill is there presented;
(iii) where no place of payment is specific and no address
given, and the bill is presented at the drawee's or
acceptor's place of business if known, and if not,
at his ordinary residence if known;
(iv) in any other case if presented to the drawee or
acceptor wherever he can be found, or if presented
at his last known place of business or residence;
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Bills of Exchange
(e) where a bill is presented at the proper place, and, after
the exercise of reasonable diligence, no person authorized
to pay or refuse payment can be found there, no further
presentment to the drawee or acceptor is required;
(f) where a bill is drawn upon, or accepted by two or more
persons who are not partners, and no place of payment
is specified, presentment must be made to them all;
(g) where the drawee or acceptor of a bill is dead, and no
place of payment is specified, presentment must be made
to a personal representative, if such there be, and, with
the exercise of reasonable diligence, he can be found;
(h) where authorized by agreement or usage, a presentment
through the post office is sufficient.
Excuses for delay or non-presentment for payment
46. (1) Delay in making presentment for payment is excused when
the delay is caused by circumstances beyond the control of the
holder, and not imputable to his default, misconduct, or negligence.
When the cause of delay ceases to operate, presentment must be
made with reasonable diligence.
(2) Presentment for payment is dispensed with--
(a) where, after the exercise of reasonable diligence,
presentment, as required by this Act cannot be effected;
(b) where the drawee is a fictitious person;
(c) as regards the drawer, where the drawee or acceptor is
not bound, as between himself and the drawer, to accept
or pay the bill, and the drawer has no reason to believe
that the bill would be paid if presented;
(d) as regards an indorser, where the bill was accepted or
made for the accommodation of that indorser, and he has
no reason to expect that the bill would be paid if presented;
(e) by waiver of presentment, express or implied.
(3) The fact that the holder has reason to believe that the bill
will, on presentment, be dishonoured, does not dispense with the
necessity for presentment.
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Dishonour by non-payment
47. (1) A bill is dishonoured by non-payment--
(a) when it is duly presented for payment and payment is
refused or cannot be obtained; or
(b) when presentment is excused and the bill is overdue and
unpaid.
(2) Subject to this Act, when a bill is dishonoured by non-
payment, an immediate right of recourse against the drawer and
indorsers accrues to the holder.
Notice of dishonour and effect of non-notice
48.  Subject to this Act, when a bill has been dishonoured by non-
acceptance or by non-payment, notice of dishonour must be given
to the drawer and each indorser, and any drawer or indorser to
whom such notice is not given is discharged:
Provided that--
(a) where a bill is dishonoured by non-acceptance, and notice
of dishonour is not given, the rights of a holder in due
course subsequent to the omission shall not be prejudiced
by the omission;
(b) where a bill is dishonoured by non-acceptance, and due
notice of dishonour is given, it shall not be necessary to
give notice of subsequent dishonour by non-payment unless
the bill shall, in the meantime, have been accepted.
Rules as to notice of dishonour
49.  Notice of dishonour, in order to be valid and effectual, must
be given in accordance with the following rules:
(a) the notice must be given by or on behalf of the holder,
or by or on behalf of an indorser who, at the time of
giving it, is himself liable on the bill;
(b) notice of dishonour may be given by an agent either in
his own name, or in the name of any party entitled to give
notice whether that party be his principal or not;
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Bills of Exchange
(c) where the notice is given by or on behalf of the holder,
it enures for the benefit of all subsequent holders and all
prior indorsers who have a right of recourse against the
party to whom it is given;
(d) where notice is given by or on behalf of an indorser
entitled to give notice as hereinbefore provided, it enures
for the benefit of the holder and all indorsers subsequent
to the party to whom notice is given;
(e) the notice may be given in writing or by personal
communication, and may be given in any terms which
sufficiently identify the bill, and intimate that the bill has
been dishonoured by non-acceptance or non-payment;
(f) the return of a dishonoured bill to the drawer or an indorser
is, in point of form, deemed a sufficient notice of dishonour;
(g) a written notice need not be signed, and an insufficient
written notice may be supplemented and validated by
verbal communication; a misdescription of the bill shall
not vitiate the notice unless the party to whom the notice
is given is in fact misled thereby;
(h) where notice of dishonour is required to be given to any
person, it may be given either to the party himself, or to
his agent in that behalf;
(i) where the drawer or indorser is dead, and the party giving
notice knows it, the notice must be given to a personal
representative if such there be, and with the exercise of
reasonable diligence he can be found;
(j) where the drawer or indorser is bankrupt, notice may be
given either to the party himself or to the trustee;
(k) where there are two or more drawers or indorsers who
are not partners, notice must be given to each of them,
unless one of them has authority to receive such notice
for the others;
(l) the notice may be given as soon as the bill is dishonoured
and must be given within a reasonable time thereafter;
in the absence of special circumstances notice is not
deemed to have been given within a reasonable time
unless--
(i) where the person giving and the person to receive
notice reside in the same place, the notice is given
or sent off in time to reach the latter on the day
after the dishonour of the bill;
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(ii) where the person giving and the person to receive
notice reside in different places, the notice is sent
off on the day after the dishonour of the bill, if
there be a post at a convenient hour on that day,
and if there be no such post on that day, then by
the next post thereafter;
(m) where a bill when dishonoured is in the hands of an
agent, he may either himself give notice to the parties
liable on the bill, or he may give notice to his principal.
If he gives notice to his principal, he must do so within
the same time as if he were the holder, and the principal
upon receipt of such notice has himself the same time for
giving notice as if the agent had been an independent
holder;
(n) where a party to a bill receives due notice of dishonour
he has, after the receipt of such notice, the same period
of time for giving notice to antecedent parties that the
holder has after the dishonour;
(o) where a notice of dishonour is duly addressed and posted,
the sender is deemed to have given due notice of dishonour
notwithstanding any miscarriage by the post office.
Excuses for delay in giving notice of dishonour
50. (1) Delay in giving notice of dishonour is excused where the
delay is caused by circumstances beyond the control of the party
giving notice, and not imputable to his default, misconduct or
negligence. When the cause of delay ceases to operate the notice
must be given with reasonable diligence.
(2) Notice of dishonour is dispensed with--
(a) when, after the exercise of reasonable diligence, notice,
as required by this Act, cannot be given to or does not
reach the drawer or indorser sought to be charged;
(b) by waiver express or implied; notice of dishonour may
be waived before the time of giving notice has arrived,
or after the omission to give due notice;
(c) as regards the drawer in the following cases, namely:
(i) where the drawer and drawee are the same person;
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Bills of Exchange
(ii) where the drawee is a fictitious person or a person
not having capacity to contract;
(iii) where the drawer is the person to whom the bill is
presented for payment;
(iv) where the drawee or acceptor is as between himself